y THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON FEBRUARY 3, 1993. ____________________________________________________ MOTION TO DISMISS GRANTED: January 21, 1993 ____________________________________________________ GSBCA 12172-P BERKSHIRE COMPUTER PRODUCTS, Protester, v. DEPARTMENT OF COMMERCE, Respondent, and PA SYSTEMS, Intervenor. Carl J. Peckinpaugh of Akin, Gump, Hauer & Feld, L.L.P., Washington, DC, counsel for Protester. Mark Langstein, Lisa J. Obayashi, and Lynn Patton, Office of the Assistant General Counsel for Finance and Litigation, Depart- ment of Commerce, Washington, DC, counsel for Respondent. Bill W. Bourland, Fairfax, VA, counsel for Intervenor. Before Board Judges LaBELLA, HENDLEY, and BORWICK. BORWICK, Board Judge. Background This protest was filed on November 16, 1992, by Berkshire Computer Products (Berkshire) contesting the award of a contract by the Department of Commerce, respondent, for disk drives to intervenor PA Systems. The disk drives are for use with respondent's Digital Equipment Corporation (DEC) mainframe computers. The procurement was negotiated and award made on the basis of the low-price technically acceptable offer. Berkshire claims that it should have been awarded the contract or, alternatively, that the award to PA Systems should be canceled and the competition reopened. The principal ground for Berkshire's claim is that PA Systems does not meet the requirements of the Commercially Available Equipment clause of the solicitation. There were five other allegations, including the argument that PA Systems and respondent engaged in improper post-award discussions. There are a number of manufacturers of DEC compatible controller boards, including LAGO Systems Inc. (LAGO) and EXSYS. Berkshire's allegations against the award to PA Systems center on PA Systems' attempted substitution after award of the DEC compat- ible SDI controller board manufactured by EXSYS for one manufac- tured by LAGO systems. This substitution was pursuant to an alternate proposal submitted after pre-award discussions. The substitution was made as a result of LAGO Systems entering into a consent agreement providing a phase-out of manufacture and sales of DEC compatible third-party SDI adapter boards in patent litigation brought by DEC. Respondent filed a motion to dismiss maintaining that protester lacks interested party status to challenge the award because (1) protester was fourth highest-priced offeror, and (2) two technically compliant offerors were lower priced than pro- tester. We reserved ruling on respondent's motion until consid- eration of the merits. The parties have elected to submit their dispute on the record pursuant to Board Rule 11. Upon consider- ation of the record, we grant respondent's motion to dismiss, concluding that a technically acceptable vendor submitted an offer using LAGO equipment, that was lower-priced than protester, that protester was not in line for award, and, therefore, was not an "interested party" under the Brooks Act, 40 U.S.C. 759(f)(9)(B) (1988), as our appellate authority has defined that term. Berkshire has not alleged or proven that a new round of BAFOs in light of the alleged post- award discussions could have put it in line for award. We thus dismiss the protest without reaching its merits. In light of our disposition, we do not address the issue whether PA Systems' post-award substitution of an EXSYS SDI controller board constituted wrongful post-award discussions, or whether the supply of disk drives using the EXSYS board met the mandatory requirements of the solicitation. Findings of Fact The Solicitation 1. The solicitation for this procurement provided in perti- nent part: C.1.3. COMMERCIALLY AVAILABLE EQUIPMENT The equipment offered under this contract shall be commercially available equipment. For purposes of this RFP commercially available means that the contractor or storage array [original equipment manufacturer] OEM must have the same type and model disk storage offered herein installed in at least one (1) non-contractor affiliated site. Additionally, the contractor must have an established customer base of a total of at least 200 GB of disk storage of the same series in- stalled in non-contractor affiliated sites. . . . . This customer base need not be the exact model of disk storage as offered herein, only within the same disk series. . . . . C.2. HARDWARE The contractor shall provide magnetic disk storage arrays. A magnetic disk storage array is defined as a cabinet containing multiple independent disk drives of the same type and model (i.e. multiple independent disk drives of the same type and model (i.e. identical). A disk drive is defined as a single logical unit address- able by the DIGITAL operating system. A logical disk may not consist of more than two physical disks. Each storage array shall meet the following requirements[.] . . . . C.2.1.3 SOFTWARE REQUIREMENTS The magnetic disk storage array must operate with the currently supported versions of DIGITAL's operating systems, VMS and ULTRIX-32, and all future releases of these operating systems. . . . . C.2.2.8. MTBF Minimum mean time between failure (MTBF) for a disk drive (single logical unit) shall be 150,000 hours. A failure is defined as a disk malfunction needing down time to correct the problem. The MTBF shall be comput- ed based on the drives being powered on and accessed throughout the test interval. MTBF will be verified through contractor documentation. . . . . M.1. BASIS FOR AWARD Unless all offers are rejected, award will be made to the lowest priced offeror who submits an offer conform- ing to the solicitation, and who is responsible and technically acceptable. Protest File, Exhibits 4, 8, and 12. Configuration of Disk Storage Arrays 2. Disk storage arrays consist of logical disk drives. Logical disk drives are comprised of head disk assemblies (HDAs) manufactured by various companies such as DEC, Hitachi, or Seagate. Declaration of Respondent's Computer Equipment Analyst, Marie L. Porazzo (Porazzo Declaration) (undated), 11. HDAs are placed into an enclosure and each logical drive is plugged into a standard disk interface (SDI) controller board made by either DEC, LAGO, or EXSYS. Id. After connection to a power supply, the logical drives are placed in standard rack mounts, plugged into a cabinet power strip, and formatted and burned in with standard software. Id. It is the SDI controller board that is the critical component of the logical disk drive manufactured by the third party vendors in this case. Respondent's Record Submission, Exhibit 8. The proposals 3. In its initial proposal, as well as other vendors offered the LAGO LS90 disk drive subsystem which has an installed base of 3,750 gigabytes of disk storage. Protest File, Exhibit 15. The LAGO LS90 disk storage array incorporates the LAGO SDI controller board and the Hitachi DK516-15 fixed disk drive. Id. at C, Technical Attachment 2 at 1. 4. By letter dated June 18, respondent wrote to all vendors asking, in light of the patent litigation between DEC and vendors of third party SDI controller boards and the impending merger of LAGO Systems and Storage Technology Corporation, whether the vendors could make an unconditional offer which would allow respondent to order equipment throughout the contract life. Protest File, Exhibits 1, 16, 17. 5. PA Systems responded to the inquiry proposing substitu- tion of an EXSYS SDI controller board, at the same price as the LAGO SDI controller board, should a substitution be necessary. Protest File, Exhibit 17. 6. In response to respondent's letter, proposed purchas- ing enough of the LS90 disk controller boards to meet Government requirements and integrating the boards with Hitachi disk drives. further stated: "We are integrating Hitachi disk drives with the LAGO device in order to meet the disk array requirements of the solicitation." Protest File, Exhibit 17.[foot #] 1 7. proposal states, in response to C.2.2.8 of the solicitation titled "MTBF," that The MTBF of the LS90 disk drive unit is 250,000 hours. LAGO Systems, Inc., utilizes the superb Hitachi DK 516 5 1/4" form factor ESDI disk drive as the basis for this RFP. The Hitachi DK 516 disk drive is rated by the manufacturer at 500,000 hour MTBF. As the LS90 is utilizing a concatenated configuration with two physi- cal drives comprising one logical unit, LAGO is conser- vatively halving the MTBF to 250,000 hours. In addition to this contractor statement assuring the 150,000 hour MTBF, LAGO also certifies the MTBF of the single disk drive as 500,000 hours. Supplemental Protest File, Exhibit C, Techni- cal Attachment 3, MTBF and Technical Attachment 2, at 22. The LAGO certification was based on extrapolation from an actual failure rate test producing a MTBF of 262,080 from October 1990 through July 1991. Id., Technical Attachment 3 at 6. 8. states that the LS90 disk drive is formatted at 2.35 GB, and is two physical disks concatenated as one logical unit. The MTBF of the LAGO LS 2.35 GB disk drive subsystem is 250,000 hours. Proposal at C.2.3.1., Supplemental Protest File, Exhibit C. 9. provides for the use of for its mainte- nance and serviceability program. Supplemental Protest File, Exhibit C at Exhibit M-1. maintenance is outlined in great detail in its proposal in C.2.3.10 and C.8 through C.9.3. Supplemental Protest File, Exhibit C. Included in those para- graphs are schedules for on-call and per-call maintenance, time and material maintenance, and spare and replacement parts. Id. ----------- FOOTNOTE BEGINS --------- [foot #] 1 Protester assumed that had proposed the EXSYS board. See Protester's Record Submission Brief at 26. Protester is wrong. ----------- FOOTNOTE ENDS ----------- 10. PA Systems' BAFO was the lowest price--a raw dollar cost of $2,804,474.95. was second in line on price, was third in line, and Berkshire was fourth in line with a raw dollar cost of . Protest File, Exhibit 25. The award and post-award issues: 11. On November 4, 1992, contract was awarded to PA Sys- tems. Protest File, Exhibit 26. On November 10, 1992, PA Systems informed the Government that: Agreements between LAGO Systems and DEC have forced PA Systems to initiate its alternate plan for the fulfill- ment of the Bureau of the Census' requirement for disk storage. . . . PA Systems proposes to deliver the EXSYS Race 4400 Series Disk Storage Arrays in lieu of the LAGO Systems LS90 Model II Disk Storage Arrays. . . . This solution was previously documented in our June 24, 1992 letter and presumed acceptable by the Govern- ment. Protest File, Exhibit 27. Discussion Both respondent and PA Systems argue that Berkshire lacks standing as an interested party because Berkshire is fourth in line for award. Berkshire argues in its record submission that the two lower-priced companies (other than PA Systems) are ineligible for award for "the same reasons as discussed in connection with the PA Systems proposal." Record Submission at 26. While vague, we take that argument to mean that of all the competitors in this procurement, only Berkshire is in line for award, because only it offered disk drive arrays which meet the commercial availability requirement as defined in the RFP. Berkshire's highly technical argument is that the commercial availability requirement applies to a storage array "containing multiple independent disk drives of the same type and model," and that only it has "multiple independent disk drives" with the necessary installed base. Berkshire maintains that the other offerors are assembling arrays using components from third party vendors, and that the other offerors cannot show that they have the installed base required by the solicitation. Protester's Record Submission Brief at 5, 8. Both are lower priced than protester, and if but one of those vendors is technically acceptable, then, under the evaluation criteria of the solicitation, protester is not in line for award as the low-cost technically acceptable offeror, and thus lacks the requisite "direct economic interest" to be an interested party. This result is required by a ruling of our appellate authority, which has held that: In contrast to statutes like the Administrative Proce- dure Act, under which Congress has extended the tradi- tional basis for standing beyond direct economic injury . . . [citations omitted], in the Brooks Act Congress has deliberately and substantially narrowed the class of persons entitled to invoke the authority of the Board. United States v. International Business Machines Corp., 892 F.2d 1006, 1010 (Fed. Cir. 1990). Thus, concluded the Court, in a procurement by sealed bid, where the vendors offer essentially the same package of products and services, only the second low bidder in line for award has the requisite direct economic interest. Id. at 1011. We have held that the same is true of a negotiated procurement in which vendors have to meet minimum requirements and the contract is awarded on the basis of low price. Computer Maintenance Corp., GSBCA 11718-P, 92-2 BCA 24,893, 1992 BPD 85; Rocky Mountain Trading Co., GSBCA 11121- P, 91-2 BCA 23,877, at 119,590, 1991 BPD 71, at 2. Once a challenge is made to a protester's "direct economic interest," protester has the burden of proving that the lower priced offerors are not responsive or technically acceptable so as to place a protester in line award. International Data Products Corp., GSBCA 10517-P, 90-2 BCA 22,797, 1990 BPD 57. Protester has not demonstrated that it is line for award. Protester's statement in its record submission that offered a non-compliant EXSYS board is wrong. Protester also argues that proposal is unacceptable for the same reasons that PA Systems' proposal is unacceptable. Protester's Record Submission Brief at 26. In this regard, protester must refer to the argument that PA Systems is not the manufacturer of a disk array and cannot show the required installed base to meet the commercial availability requirement. Protester's Record Submis- sion at 19. As to commercial availability, the record demonstrates that offered a fully compliant technical proposal. In its original proposal, stated that the LAGO LS90 disk arrays would be provided by to meet the requirements of the solicitation and stated that the LAGO LS90 disk drive subsystem had an installed base of 3,750 gigabytes of disk storage. Finding 3. The disk drive subsystem as originally proposed meets the commercial availability requirement. We see no change in proposal by its letter dated June 25, that would cause to fall out of compliance. statement that "we are integrating Hitachi disk drives with the LAGO device in order to meet the disk array requirements of the solicitation," Finding 6, does not cause to fall out of compliance, because the LAGO LS90 disk array is nothing more than a LAGO board integrated with a Hitachi disk drive. Finding 3. The solicitation required the "storage array OEM" to meet the commercial availability requirement. Finding 1. The record does not demonstrate that the equipment to be supplied by was not LAGO equipment. At best, was the integrator of the LAGO storage array, using all the components of that array including the critical component--the SDI controller board manufactured by LAGO. Finding 2. Protester also argues that a vendor (such as ) using LAGO SDI adapter boards cannot meet the solicitation's requirements for reliability. proposal meets MTBF requirements. provided its own and the manufacturer's certification that the MTBF of the LS90 disk drive unit was 250,000 hours, with the Hitachi disk drive having a MTBF of 500,000 hours. Findings 7, 8. These certifications were, in part, based on actual failure rates. Finding 7. Protester counters the MTBF figure certification with standard commercial literature for Hitachi Winchester disk drives showing an MTBF figure of 150,000 hours. Protester argues that if the disk drives are joined together, the MTBF of the units is thus reduced to 75,000 hours, presumably as a matter of statisti- cal theory. Protester's Record Submission Brief at 25. Pro- tester's position is not convincing. The standard commercial literature does not state that the 150,000 MTBF is the maximum failure rate. It could be better, and the certifications indi- cate that the failure rate is, in fact, better, based on actual failure rate tests. Finding 7. The argument that two drives joined together would have half the reliability of a single drive is a statistical theory, not a proven fact. Protester's statis- tical theory based on a figure in standard commercial literature does not outweigh the evidence presented based on actual tests. With regard to individual serviceability, in its letter dated December 21, 1992, Berkshire states that the serviceability issue is relevant to PA Systems' LAGO-based solution and argues in its record submission that proposal is deficient for the same reason as PA Systems' proposal. Protester Record Submission Brief at 26. Serviceability is simply another term for disk drive maintenance. Berkshire, however, only questions vendor's maintenance proposals for an EXSYS-based solution. Id. at 14. Berkshire has not presented any evidence calling into question comprehensive maintenance plan. See Finding 9. Post-award discussions Protester argues that respondent's alleged post-award discussions with awardee do not make it an interested party. Protester alleges that PA Systems and the Government conducted improper post-award discussions, presumably in allowing the substitution of the EXSYS SDI controller board. PA Systems, on November 10, 1992, proffered its alternate proposal to respondent upon discovering that it would not be able to provide a timely and sufficient number of LAGO SDI adapter boards as specified in the contract. The price of the original proposal and the alter- nate proposal were the same. Findings 5, 11. Protester relies on Federal Data Corp., 69 Comp. Gen. 196, 90-1 CPD 104 (Jan. 20, 1990), for the proposition that the post-award discussions in this case were improper and that another round of BAFOs should have been conducted. In Federal Data, the Government conducted post-award discussions by allowing the awardee to modify its proposal to conform to the technical requirements of the solicitation. The awardee knew of the problems with the technical sufficiency of its proposal prior to award and was making a new proposal to the Government. Id. at 198. These discussions were held to be improper and another round of BAFOs was ordered. We have refused to dismiss for lack of interested party status in negotiated procurements, where the matter in controver- sy could lead to a different ranking of offerors, for example, where, the relief might well lead to revision of the requirement and further competition among the vendors. See Data Switch Corp., GSBCA 11582-P, 92-1 BCA 24,673, at 123,106, 1991 BPD 344, at 5. This case is unlike Data Switch or Federal Data, for here protester does not plead or establish that it could improve either technical or cost aspects of its proposal so as to dis- place . This case is remarkably similar to International Transcription Services, Inc., B-240488, 90-2 CPD 437 (Nov. 28, 1990), which distinguished Federal Data Corp. In International Transcription Services, after award the awardee substituted a Konica copier for the Toshiba copier it had propos- ed.[foot #] 2 Id. at 3. The protester (ITS) in Inter- national Transcription Services took exception to the Govern- ment's decision to permit a post-award substitution of copiers, "which ITS likens to improperly conducting discussions with only one offeror." Id. The General Accounting Office denied the protest stating: Furthermore, this situation is unlike that in our recent decision, Federal Data Corp., 69 Comp. Gen. 196 (1990), 90-1 CPD 104, where we sustained the protest because the agency in essence was conducting post-award discussions in an attempt to correct the awardee's non- compliant proposal without affording the protester an opportunity to revise its offer at the same time, and where it was not clear that the awardee could readily remedy the problem. Here, there is no question regard- ing the awardee's ability to offer acceptable substi- tute equipment, and the protester, having already received the maximum possible technical score and not suggesting that it would have significantly lowered its ----------- FOOTNOTE BEGINS --------- [foot #] 2 The offer of a Toshiba copier violated Federal statute prohibiting government agencies from procuring products from the Toshiba Corporation. Id., at 1. In this case the ___ substitution arose from a consent decree in patent litigation which disallowed LAGO from selling DEC compatible SDI controller boards after December 31, 1992. Protest File, Exhibit 18. ----------- FOOTNOTE ENDS ----------- BAFO prices, provides no basis for us to conclude that the agency's failure to afford it the opportunity to submit another BAFO had any effect on its overall relative standing for award. Id. at 6. Protester is fourth in line for award in this procure- ment by virtue of its high price. Finding 10. There has been no pleading or proof that protester could improve its competitive position in relation to , and thus there is no basis for concluding that it is an interested party. The protest is DISMISSED for lack of an interested party. The limited suspension of respondent's delegation of procurement authority lapses by its terms. _________________________ ANTHONY S. BORWICK Board Judge We concur: _________________________ VINCENT A. LaBELLA Board Judge _________________________ JAMES W. HENDLEY Board Judge